Studio Theaters, Inc. v. Washington , 1965 Pa. LEXIS 560 ( 1965 )

Opinion by

Mr. Justice Jones,

City of Washington, Pennsylvania, a third class city, on January 27, 1964, adopted an ordinance which imposed a tax “upon the privilege of attending or engaging in amusements including every form of entertainment, diversion, sport, recreation and pasttime.”¹ On March. 9, 1964, the city amended this ordinance to define the word “amusement” in such manner as to exempt certain forms of entertainment from its impact: “Provided further: that ‘amusement’ shall not include any form of entertainment, the proceeds of which, after payment of reasonable expenses, inure exclusively to the benefit of religious, educational, or charitable institutions, societies, or organizations; veteran’s organizations; or police or fireman’s organizations. Also, the within tax shall not be levied against membership in or membership dues, fees or assessments of charitable, religious, beneficial or nonprofit organizations such as sportsmen’s recreational, golf and tennis clubs, girl and boy scout troops and councils.”

Studio Theaters, Inc. (Theaters), the operator of the Penn Theatre in Washington, Pa., instituted an action in equity in the Court of Common Pleas of Washington County against the city, the members of the city council and other city officials seeking (a) injunctive relief from the enforcement of the ordinance and the collection of taxes thereunder, or, in the alternative, (b) a direction that the city and its officials, enforce and collect the tax from all producers of amusements as defined in the original ordinance. The gravamen of this action is that the amended ordinance provides for exemptions which affront the Constitution in that they lack uniformity and are unreasonable, arbitrary and discriminatory in the classifications provided.

The city and its officials filed preliminary objections, divided into four separate parts, which, regardless of their nomenclature, raised several questions; (1) that equity lacked jurisdiction because (a) Theaters had an adequate statutory remedy under the “Tax Anything Act” and The Third Class City Code, supra, to attack the validity of the exemptions in the ordinance, and (b) that Theaters lacked the capacity to sue because of its failure to comply with the “Fictitious Corporate Name Act”;² (2) that the City has power to levy this tax and, that being so, equity has no jurisdiction to pass on the validity of these tax exemptions; (3) that Theaters failed in its complaint to state a cause of action. The Court of Common Pleas of Washington County held that an action in equity did lie and dismissed the'preliminary objections. The City, under the provisions of the Act of March 5, 1925, P. L. 23, §1, 12 P.S. §672, has appealed from the order of the court below.

Preliminarily, we must pass upon a motion to quash this appeal filed by Theaters upon the ground that the Act of 1925, supra, is not available to the City in that there is no true question of jurisdiction involved on this appeal.

Despite numerous-decisions of our courts, there is still, apparently, confusion as to the availability of the Act of 1925, suprá, as the vehicle for an appeal which otherwise, by reason of the interlocutory nature of the order, would be unavailable at this stage of the proceeding. Under the Act of 1925, supra, the sole question appealable is whether or not the court below had jurisdiction either over the person of the defendant or the subject matter of the action. In the case at bar, the City attacks what it deems to be the jurisdiction of the court of equity over the subject matter of this action. The test of jurisdiction is whether the court has power to enter upon the inquiry: Zerbe Township School District v. Thomas, 353 Pa. 162, 44 A. 2d 566; Adler v. Philadelphia, 397 Pa. 660, 664, 156 A. 2d 852; University Square No. 1, Inc. v. Marhoefer, 407 Pa. 257, 180 A. 2d 427; Seligsohn Appeal, 410 Pa. 270, 189 A. 2d 746.

In Witney v. Lebanon City, 369 Pa. 308, 311, 312, 85 A. 2d 106, this Court said: “In Zerbe Township School District v. Thomas, 353 Pa. 162, 44 A. 2d 566, we stated principles which are here applicable, namely that even though a plaintiff have no standing to bring his action, even though his complaint be demurrable, even though he fail to establish its allegations, even though the court should finally conclude that the relief he seeks should not be granted, not any or all of these circumstances would enter into, much less determine, the question whether the court had jurisdiction of the litigation. We there pointed out that the test of jurisdiction was the competency of the court to determine controversies of the general class to which the case presented for its consideration belonged,— whether the court had power to enter upon the inquiry, not whether it might ultimately decide that it was unable to grant the relief sought in the particular case; that the Act of 1925 was not intended to furnish a short cut to a determination of the issues of law or fact raised by the pleadings and that it was not concerned with matters going to the right of the plaintiff to recover on his cause of action but only with his right to have his cause of action heard and determined. In support of those principles many decisions of our appellate courts were cited, and a host of later authorities has since been added to the long list there set forth.” On this motion to quash our inquiry is whether this appeal presents any question involving jurisdiction, in its true sense, cognizable under the 1925 statute. If none of the questions raised on this appeal involve a question of jurisdiction, the appeal must be quashed; if the appeal does raise any. question of jurisdiction, then the appeal should not be ..quashed but our determination on. the appeal is limited to a consideration only of the question involving jurisdiction: Seligsohn Appeal, supra.

First, the City contends that the court below, sitting in equity, had no jurisdiction because Theaters had available under the “Tax Anything Act”, supra, and The Third Class City Code, supra, an adequate remedy at law. Even if a court of equity dismisses an objection to the court having “jurisdiction³ of the subject matter” because there is a complete and adequate remedy at law, such an order is not appealable under the 1925 statute: White v. Young, 402 Pa. 61, 166 A. 2d 663. The availability in the case at bar of an adequate remedy at law, not involving a question of jurisdiction, is not before us on this appeal.

Next the City contends that the court below lacked jurisdiction because Theaters has neither stated a justiciable cause of action in its complaint nor, by reason of noncompliance by Theaters with the “Fictitious Corporate Name Act”, supra, has Theaters the capacity to sue. Neither the failure to state a cause, of action nor the lack of capacity to sue (Witney v. Lebanon City, supra, p. 311) involve a question of the competency of the court below to determine controversies of the general class to which the case presented for its consideration belong. Under the 1925 statute the contentions of the City in these respects are not before us for consideration.

Lastly, the City contends that the court below lacked jurisdiction because what Theaters attacks in this action is not the power of the City to tax but the propriety of the exemptions granted from the impact of the tax. This contention does involve a question of jurisdiction in the true sense, requiring that the motion to quash be denied and that we limit our inquiry on this appeal to this last contention of the City.

The City misinterprets the attack made upon the amended ordinance by Theaters. An examination of the complaint in equity reveals the real thrust of the attack upon this amended ordinance, i.e., a challenge to the constitutional validity of the exemptions from tax provided in that ordinance. The teaching of our case law is that, where the controversy involves a challenge to the constitutional validity of a taxing statute or ordinance, such a controversy falls within the general class of cases wherein equity does have jurisdiction and competency to act: Bell Telephone Company of Pennsylvania v. Driscoll, 343 Pa. 109, 21 A. 2d 912; Y.M.C.A. v. Reading, 402 Pa. 592, 598, 167 A. 2d 469; Philadelphia Life Insurance Company v. Commonwealth, 410 Pa. 571, 190 A. 2d 111. Whether a court of equity, having such jurisdiction to act, should act in view of the presence of an adequate remedy at law or for some other valid reason is another matter altogether.⁴

In the posture in which the case at bar is presented and in view of the real challenge being that to the constitutionality of the taxing ordinance, the court below did have jurisdiction and the court below properly so decided.

Order affirmed. Costs on City.

1 This ordinance, purporting to have been passed under the authority of the so-called “Tax Anything Act” (Act of June 25, 1947, P. L. 1145, §1 et seq., as amended, 53 P.S. §§6851-6859) and The Third Glass City Code (Act of June 23, 1931, P. L. 932, §1 et seq., as amended, 53 P.S. §§35101-39932), provided the manner of licensing, the imposition of duties and powers on the city treasurer in connection with the collection of the tax and the imposition of penalties for violation of the ordinance.

2 Act of July 11, 1957, P. L. 783, §1 et seq., 54 P.S. §81-104.

3 The word “jurisdiction” is used in a loose sense as so frequently- occurs.

4 By the same token, if there is a statutory remedy which is appropriate and adequate, a party may pursue this statutory remedy even though a court of equity may also have jurisdiction of the subject matter: Blue Cross Appeal, 416 Pa. 574, 209 A. 2d 799 (decided this date).